Ky. cities must not follow Austin on ousting Uber

Editor’s note: The following op-ed by Kelly Smith, Bluegrass Institute vice president of strategic partners, appears in today’s Lexington Herald-Leader.

SmithThe lessons for Kentucky coming from one Texas city involving Uber and Lyft would be sad and absurd if its actions hadn’t become such a joke.

Austin Mayor Steven Adler, who failed to provide the leadership needed to prevent his city from driving out the free-market ride-sharing companies, is now floating the idea of requiring a “validator badge” in order to force independent-minded local travelers to commute in the way local politicians and bureaucrats deem acceptable.

So what mode of travel would Austin’s government leadership accept? The most innovative transportation concepts offered by city governments within the past decade have been recreating the 1880s urban transit trolleys and free bicycle access — bicycles being that most modern and innovative of transportation ideas invented in 1817.

Thus you would think Austin would approve of anything it regulates, including its subsidized taxicab cartel. But you’d be wrong. With a black market for ride-sharing emerging, city officials now want to deregulate the local taxicab industry — the very cartel it regulated into power in the first place.

Speaking of power, why don’t the artistic and creative types who abound in Austin recognize when a city steals the ideas and innovative intellectual capital from people who turned one particular idea into the successful Uber enterprise?

Speaking of irony, Austin will host in June the Smart Cities Innovation Summit which, according to its online program, tackles such issues as “a dense network of public transit, carpooling and car-sharing services such as Carma, Car2Go and Zipcar …”

It’s clear that Austin wants to play at being the “invisible hand” of commerce and pick winners and losers. But if you’re the creative, artsy type and want to see real free-market innovation, skip Austin and head to Grand Rapids, Mich., where the power of the marketplace on the art scene is unleashed annually via the privately sponsored ArtPrize. The entire city for more than two weeks each year becomes an interactive art gallery with the largest publicly attended exhibit on the globe. You can even use Uber to hop from one exhibit to the next.

Let’s hope Kentucky does a better job of protecting the freedom of its artsy and creative entrepreneurs to pursue their dreams and grow successful — maybe with innovative craft beers, new distilleries and even more rideshare apps.

Kelly L. Smith is vice president of strategic partners for the Bluegrass Institute, a free-market think tank. Reach her at

Rankings of Kentucky’s educational performance still flawed – Déjà vu

Prichard Committee and KY Chamber get their rankings wrong

Back in January, I wrote a fairly extensive blog about the poor ranking processes in two then new reports from Education Week’s Quality Counts series and from the UK Center for Business and Economic Research (CBER).

Just as in many years past, these rankings are clearly problematic.

But, that has not stopped a new report released a few weeks ago by the Prichard Committee for Academic Excellence and the Kentucky Chamber of Commerce from citing both the Quality Counts and CBER material as though it was high grade “stuff.”

That’s pretty disappointing, because we are not going to fix problems with Kentucky’s public education system if we don’t even establish a solid idea of how that system currently performs.

So, if you are interested in “The Rest of the Kentucky Education performance story”, as the late Paul Harvey would have so nicely put it, click the “Read more” link to get a more complete guide to Kentucky education.

[Read more…]

Bluegrass Beacon: Regulatory chickens now roosting in coal country

BluegrassBeaconLogo“Did you ever wonder why people order diet sodas with cheeseburgers and large fries? Or, why we leave cars worth thousands of dollars in our driveways and useless junk in our garages? Or, why Noah didn’t just swat those two mosquitoes?” one of those useless chain emails queried from my inbox.

Not really.

But I have wondered why union bosses representing coal miners would enthusiastically endorse presidential candidates who overtly promise to “bankrupt” their industries and then feign shock and anger when the chickens carrying the consequences of such an approach arrive home to roost.

Such anger was on full display when more than 3,000 current and former coal miners led by the United Mine Workers of America (UMWA) rallied recently at the Lexington Convention Center to demand that Congress bail out their pension and health-insurance plans.

But it wasn’t Congress, unpopular though it is, that turned loose the full regulatory powers of the Environmental Protection Agency – which has implemented $10 billion in new fossil-fuel regulations and has planned an additional $10 billion worth of new rules.

It wasn’t Congress which designed unattainable air-and-water standards behind a façade of addressing climate change.

It wasn’t Congress that passed laws forcing mining companies into bankruptcy court, where fights over dwindling resources and declining pension and health-insurance benefit funds are predictably occurring.

These are the results of a president whose administration’s primary legacy will be that of unconstitutionally bypassing the representative branch of government in order to implement suffocating regulations on the path to achieving its extremist environmental agenda.

It’s the same politician who UMWA president Cecil Roberts gushed over as a candidate, claiming in May 2008 that then-Sen. Barack Obama “shares the values of UMWA members and our families” and “will implement the clear change in direction UMWA members – and indeed all American working people – must have if they are once again to move forward and have a true opportunity to realize the American dream.”

Regulations causing the bankruptcy of coal companies, loss of mining jobs and billions in wages are the stuff nightmares – not dreams – are made of.

Was it really the UMWA’s dream for Kentucky, the third-largest coal producing state, to no longer have a single union mine in production, which became the reality when Patriot Coal’s Highland Mine in Western Kentucky shut down on December 31, 2014, resulting in the last few remaining labor-union miners being laid off?

Talk about a bad dream. Are those Kentucky’s values?

EPA regulations certainly aren’t the only pressures facing our coal industry.

Still, what sector of America’s economy can withstand such a regulatory assault, considering a recent American Action Forum report showing that industries shed, on average, 8,100 jobs for every $1 billion in regulatory costs?

Other factors alone, like artificially low natural gas prices, cannot account for the loss nationwide of 180,000 mining jobs and $9.7 billion in wages in the coal industry just since Obama took office.

A slowdown in China’s demand for coal doesn’t begin to explain why at least 6,000 Kentucky coal miners have lost their livelihoods since 2008 or why another 18,000 positions indirectly tied to those jobs also were wiped out.

Reasonable regulatory policies would allow the coal industry to do what every other private-sector operation does: figure out how to adapt and compete in an ever-changing marketplace.

If it can’t, then allow it to fail as should have happened with every large financial institution and automotive company bailed out by Washington.

But coal companies should not be forced by crushing short tons of regulation to compete with one shovel behind their bent-over backs, hampering their ability to keep mines open and promises to retirees.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at Read previously published columns at

Bluegrass Beacon: Transparency spawns taxpayers’ trust

BluegrassBeaconLogoWhen an Oregon judge five years ago refused to block release of individual retirees’ pension information to the public via The Oregonian newspaper – which had gone to court to open the blinds and expose the recipients and amounts of public benefits – attorney Greg Hartman, who represented a coalition of labor unions and retiree groups angry about the move, promised a horror show.

“It’s going to make people subject to identity theft and fraud,” Hartman ranted.

It didn’t.

However, it did reveal that more than 800 Oregon Public Employees Retirement System beneficiaries were cashing annual six-figure retirement checks while the average state-worker retiree received around $3,000 per month.

Transparency opponents in Kentucky are engaging in similar campaigns of fear mongering and misinformation while hoping citizens just won’t open that blind to the kind of sunlight labeled “the best of disinfectants” by Louisville native and late Supreme Court Justice Louis Brandeis.

A recent letter to the Lexington Herald-Leader editor signed by the Kentucky Retirement Systems’ Board of Trustees – or at least those who were trustees before Gov. Matt Bevin’s remove-and-replace operation – falsely opined that “both state and federal privacy laws” prevent disclosure of the names of individuals receiving taxpayer-funded retirement benefits along with the amounts of those checks and number of public-pension plans in which those individuals are enrolled.

If their claim is true, how is it that several other states have joined Oregon – including Nevada and New Hampshire – in exposing individual retirees’ benefits?

There’s not a shred of truth in the claim that federal privacy laws would prevent undoing KRS 61.661, a misguided state law passed in 1972 during Wendell Ford’s administration that purposefully closed the blinds on retirees’ benefits.

The only reasonable response is to get rid of the secrecy and bring the nation’s most troubled public-retirement system out into the open and let taxpayers be privy to the depth and the darkness of the commonwealth’s pension liability hole, which will soon reach $40 billion.

Misinformation campaigns accompanied by Hartman-like feigned concern for protecting retirees’ identity must not be allowed to prevent full transparency of a crisis-riddled public retirement program.

Besides, if information regarding benefits is made readily available while Kentucky’s public workers are still on the job without mass identity theft, where’s the basis for concern that such fraud will occur if we reveal details of those workers’ pension benefits once they retire?

Taxpayers should channel their inner Donald Trump’s deal-making ability and absolutely refuse to ante up additional public-retirement funding until a majority of Frankfort’s politicians defeat the fear mongering, ignore the misinformation and open the blinds so that we the taxpayers can see the dust, the grime, the bad and the ugly of Kentucky’s retirement systems.

“People in an open society do not demand infallibility from their institutions,” former Chief Justice Warren Burger once wrote in a decision about open courts. “But it is difficult for them to accept what they are prohibited from observing.”

Instead, they ask: Why the secrecy? What is the KRS hiding?

Former Attorney General Jack Conway once observed that citizens cannot have confidence in their government without full transparency.

“The people in delegating authority do not give their public servants the right to decide what is good for the public to know and what is not good for them to know,” Conway said in a video designed to educate legislators concerning the importance of an open government.

“Being transparent isn’t always easy or convenient,” he said. “Yes it would be easier if some issues could be discussed in private first. … But keeping secrets undermines the public trust.”

And if the public’s trust was ever needed, it’s now – in the face of the nation’s worst pension predicament.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at


Quote of the day: The contrast between Obama’s and Bevin’s executive orders ‘could not be starker’

“I’ve heard the Courier-Journal call out Kentucky Republicans for applauding Gov. Bevin’s actions after having criticized President Obama’s executive orders over the past seven years. The flaw in this argument is there is a statute on the books in Kentucky specifically authorizing Gov. Bevin’s actions. There is no such federal statute to authorize the president’s actions. The contrast could not be starker: Gov. Bevin’s executive orders reorganizing various boards and commissions have been issued pursuant to statutory authority, while President Obama’s attempts to rule by executive fiat are often directly contrary to statutory authority.” –Rep. Phil Moffett, R-Louisville, in his op-ed in today’s (Louisville) Courier-Journal

BIPPS on KentuckyWired’s downsizing

[resized] Watchdog

Bluegrass Institute president Jim Waters, who attended the recent Shaping our Appalachian Region (SOAR) summit in Pikeville, is quoted on Waters points out that Gov. Matt Bevin’s announcement that the duplicative and costly KentuckyWired project had been scaled back is a ‘partial victory’ for taxpayers.

Read the complete article here.

The Bluegrass Institute also is quoted in a separate article found here, here, here, here, here and here covering Federal Communications Chairman Tom Wheeler’s announcement at the SOAR gathering that the feds would waste more taxpayer dollars on government broadband projects.

Bluegrass Beacon – Bathrooms to broadband: Government control is out of control

BluegrassBeaconLogoAre Washington’s policies these days regarding everything from bathrooms to broadband intentionally designed to systematically trash the constitutionally protected power of states, local governments and even the people themselves?

Maybe. Maybe not.

Whatever the intentions, those are the results.

Where, for example, does the U.S. Constitution even remotely allow a president enthroned in Washington to dictate the bathroom policies for transgender students in a school district 800 miles away in McCracken County, Kentucky?

That issue is at the crux of Gov. Matt Bevin’s decision to make Kentucky the 12th state to join a federal lawsuit against President Obama’s bathroom guidelines, which include threats to withhold federal funding from school districts that prohibit transgender students from using bathrooms, locker rooms and other facilities of the biologically opposite sex, and which fail to address transgender students by their preferred names and pronouns.

Whatever your personal beliefs regarding specific issues, you should think long and hard about supporting this level of federal intrusion into policies best decided by school boards or – at the very least – by individual states.

Such federal overreach blatantly ignores the Tenth Amendment, which clearly places power for most decisions in the hands of states and their individual citizens, not the federal government and its bureaucracy.

Today it’s transgender bathroom policy; tomorrow could bring an unwelcomed intrusion by Washington into an area for which you’re on the other side of the field.

Today, you may be giddy about withholding funding for school officials who don’t address transgender students by their preferred names or pronouns.

But what happens in January if a newly inaugurated Trump administration hands down “Guidelines for Protecting American Business” threatening to withhold federal financial aid for any student caught speaking against corporations while sipping his favorite white chocolate mocha Frappuccino in the local coffee house?

Will you then still be supportive of Washington and its growing brand of intrusion?

One’s goose is another’s gander, but the sauce poured over all is the same.

Control and ideology are the ingredients that dominate Washington’s sauce these days.

For instance, instead of proposing policies that place females in vulnerable environments, why didn’t the administration at the very least suggest a compromise that guides school districts to construct single-occupancy bathrooms, allowing transgender students a private facility where they could lock the door and access to safe bathroom facilities for all kids?

Because this mandate isn’t really about civil rights or protecting a minority – a very minority – group of people from discrimination.

Rather, it’s about trampling almost everyone else’s rights to privacy and expectations of simple decency and safety.

On a larger scale, it’s about advancing a goose-stepping ideology that controls as much of American life as possible.

It’s also a clue as to why the federal government is becoming obsessed with cutting into the private sector’s marketplace when it comes to policies regarding Internet access.

Someone should ask Federal Communications Commission Chairman Tom Wheeler, who brought his arrogant government-should-control-all-broadband message to the recent Shaping Our Appalachian Region (SOAR) conference in Pikeville, to justify his agency’s recent attempts to overturn state laws in Tennessee and North Carolina limiting the intrusion and failure of costly government-owned broadband networks.

Where does the U.S. Constitution even remotely allow an unelected FCC bureaucrat enthroned in Washington to overturn laws passed by elected legislators while mandating those same states must allow projects like the already colossal failure known as KentuckyWired?

Such projects have gone bankrupt in other states while placing private Internet providers at huge competitive disadvantages. They also cannot be properly maintained in light of government’s slowness and technology’s speed, including government’s tardiness in responding in anywhere close to a timely manner to the light-speed advancement of broadband technology.

Applying this same principle at the state level, when Frankfort’s politicians were offered less than $30 million in federal funding to barely subsidize KentuckyWired – a duplicative, costly proposal that the Beshear administration prior to leaving office wanted to turn into a statewide, 3,400-mile broadband network that would cost at least 10 times that amount – how much thought did they give to whether the project is something government at any level should be doing?

Apparently not nearly enough.

Now, Gov. Bevin has announced a scaled-down version of KentuckyWired contained primarily to eastern Kentucky.

The ideal would be to get rid of the project altogether and let the private sector do the broadband building – something Beshear did his best to ensure would not happen by creating a contract that would cost Kentucky taxpayers more than $100 million just to cancel.

At least with this downsizing, the damage will be contained.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

New tool shows charter school-rich Arizona outperforms Kentucky

A new tool from the Education Trust allows quick state-to-state comparisons of 2015 National Assessment of Educational Progress (NAEP) scores and changes over time from 2003 to 2015.

Of course, as we have pointed out before, it’s essential when doing such comparisons to break the scores out by race, which the new tool allows, in order to reach accurate and credible conclusions.

Here are some interesting comparisons I worked up that compare Kentucky’s white and African-American students’ NAEP scores in math and reading over time to those for Arizona, a charter school-rich state.

(Note: On these graphs, higher performance plots in the upper right quadrant, the place where you find Arizona’s (AZ) dot.)

This first graph shows how Arizona’s white eighth-grade students posted a higher math score than Kentucky’s white eighth-graders in 2015 (about 297 versus Kentucky’s 281 score, as plotted along the vertical axis) and more improvement over time between 2003 and 2015 (about a 14-point improvement versus Kentucky’s 4-point gain, as plotted on the horizontal axis).

Overall, charter rich Arizona was both a “Higher Performing” and “Higher Improving” state, while Kentucky fell in what the Education Trust shows as the “Lower Performing – Lower Improving” quadrant.

G8 Math Whites KY Vs AZ from 2003 to 2015

Now, here is how both states’ African-American students did on NAEP Grade 8 math.

G8 Math Af-Am KY Vs AZ from 2003 to 2015

Once again, Kentucky falls in the “Lower Performing – Lower Improving” part of the graph while Arizona is classed as “Higher Performing – Higher Improving.”

Of course, Kentucky reportedly does better on NAEP reading. Click the “Read more” link to see if that reputation holds out for the Grade 8 NAEP Reading results for Kentucky versus Arizona.

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Bluegrass Beacon: Teachers’ pensions and their sick-day pay

BluegrassBeaconLogoTeachers’ retirement-system bureaucrats who stand guard over the commonwealth’s unsustainable public pension gold mine would have us believe that retirement policies are too obscure and mysterious for taxpayers to grasp.

Rather, the real concern of these guardians of our public-pension system is that enough taxpayers will grasp the full extent of the generosity of these benefits and conclude: “we simply cannot afford such luscious benefits.”

Considering pension payments are determined in large part by salaries, such will likely be the response of many Louisville taxpayers in light of a recent survey released by the Jefferson County Public Schools (JCPS) showing its teachers are among the nation’s highest-paid instructors.

The JCPS salary schedule reveals that Rank One teachers with 25 years’ experience pulled in $81,887 during the 2015-16 school year, up from $80,256 in 2014-15 and $79,462 in 2013-14.

Teachers who want to use their three highest annual salaries in determining the size of their pension checks must be at least 55 years old and have taught for a minimum of 27 years.

Many teachers retire after 30 to 33 years in the classroom, allowing them to boost their pensions by including their three highest annual salaries as well as taking full advantage of a service-credit rating that increases after working for three decades.

While the salaries in JCPS are higher – much higher, in many cases – than those for teachers in other parts of the commonwealth, the salaries for Louisville’s teachers do reflect the type pay – and thus level of pensions – amassed by many administrators across the state.

Using the legislatively approved formula, a Rank One teacher in Louisville who retires after 33 years can expect an annual pension of $67,649, or $5,637 monthly.

I reached that retirement amount simply by multiplying the average of those three highest years of salary mentioned for JCPS’ Rank One teachers by the service credit that all Kentucky teachers get – 2.5 percent for the first 30 years and 3 percent for each additional year.

It adds up to an 84 percent service credit and a bountiful pension for a retiree who works for less than 190 days annually for 33 years, with the bounty coming from taxpayers, many of whom work many more days per year yet cannot even afford their own retirement plans, or certainly not benefits as rich as Kentucky Teachers’ Retirement System (KTRS) pensions.

Add in the value of unused sick days – which is not included in that $5,637 monthly check for the JCPS Rank One retiree I mentioned earlier – and teachers’ pension checks grow like Jack’s beanstalk.

State law allows teachers to embed 30 percent of the total value of all unused sick days throughout their career – a maximum of 10 days per year and 300 per career – into the formula determining their pensions.

Applying state law, the value of each sick day is determined by taking KTRS retirees’ final annual salary – $81,887 in the case of JCPS – and dividing it by 185 days, which in the case of Louisville’s veteran instructors equals $442.63. The law allows retirees to apply 30 percent of the total value of their unused sick days to determine their lifetime pensions.

If this veteran JCPS teacher accumulates 150 – or half – of the unused sick days allowed by law, she not only gets a check for $17,358 when she retires (30 percent of the value of those unused sick days minus 12.855 percent that goes into the KTRS), she also gets to apply that amount to her retirement in a way that expands the size of those pension checks for a lifetime.

In the end, our JCPS retiree’s annual pension will jump an additional $5,577 each year to more than $73,000 (not including a 1.5 percent annual cost-of-living increase) for the rest of her life just for – as the late Yogi Berra might have said – doing what she’s already paid to do.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

How’s that? Courier-Journal says ‘Kentucky ranks 19th in higher ed spending’

The Courier-Journal reports that “Kentucky ranks 19th in higher ed spending!”

The Courier references a report from Wall Street 24/7 that shows Kentucky’s annual higher ed. spending per student is $6,898.

The highest spending state is Wyoming, with annual higher ed. spending per student of $17,300.

The lowest spending state is New Hampshire with annual higher ed. spending per student of $2,591. Some other surprise low-spenders also come from the Northeast. They include Vermont, Pennsylvania, and Rhode Island.

Imagine that – “Blue States” putting up a lot less support for their colleges than Kentucky.